BrandLoop #10, August 2000

Brands? Many Lives?

One of the issues facing brands today and in the future is the apparent shortening of the “product life cycle.” While many brands continue to lead their markets after many years, others have short life cycles and are frequently designed with this in mind. Brands either live or die. They can innovate and evolve or they can be designed for a short life. Through the Loop’s Brand Positive™ research programme has uncovered some of the reasons why life cycle theory should now be revisited to ascertain how brands are being developed for short lives.

Strong brands remain strong

Numerous studies have shown that many brands that were leading the market years ago are still in that position. To a large extent it has been proved difficult for a challenging brand to overtake them. This means that they have the ability to extend the life cycle or, possibly, the effective marketing of these brands has meant that the life cycle, in its purest form, does not exist. The brand must remain relevant in an ever-changing marketing environment. It must continue to provide consumer value.

Market leaders have an in-built advantage that makes it easier for them to survive than number two or three brands. For example, some of the factors that tend to favour leading brands are as follows:

• It is easier for them to gain and maintain distribution.

• They tend to be more profitable and this feeds back into communications, research & development budgets.

• They have a higher level of consumer awareness.

• They can maintain higher promotional budgets.

• They can speak with a different voice to the consumer.

Moreover, these brands have been highly active in ensuring that their lifecycle is continually renewed. Nescafé, for example, has maintained its position as the UK’s leading instant coffee brand through frequent updating. This has extended the brand beyond the core Nescafé coffee into variants such as Espresso and Cappuccino as well as different bean types and, most recently, an organic variant. However, while the brand remains modern and relevant, the core brand values do not change and this is the key to its endurance.

The constantly-changing brand

The alternative way to retain a brand’s freshness is to keep changing it. This may be more relevant in a marketplace which is experiencing rapid change and the brand can reflect and exploit this by exhibiting new traits. This could also be a method of attracting the consumer’s attention. In the impulse confectionery market in the UK, the three major manufacturers Mars, Cadbury and Nestlé have launched “limited edition” brands. These have the effect of bringing interest to the category. Gerber Foods is recognising the seasonal nature of fruit through its Spring 2000 UK launch of Ocean Spray Cranberry Seasons. This new product has a seasonal life and is replaced with the change of seasons.

Target market issues

A product or service may have a series of short life cycles. This may occur where the product or service is used for a short time only and the target market itself is constantly changing. For example, baby foods manufacturers gain and lose consumers all the time. This means that there are always opportunities with new consumers and “established” buyers move out of the market. In this case, there cannot be one life cycle but a whole series. Other areas that are time-dependent include toys. Look at the longevity of brands such as Barbie that has been a best-selling toy for generations of girls.

Globalisation and rapid communications shorten time cycles

Outside factors that impact on a brand mean that it can often be advantageous to look outside the home country for areas of development. This works two ways and cross-border marketing means a much greater level of competition.

The Internet has been a significant inflection point here as it enables the rapid dissemination of ideas and development of products around the globe. In effect, it acts to shorten the life cycle in many categories. High profile dot.com failures will not just be the result of instable business models or poor management but could also relate to the fact that simple ideas based on open technology standards can be easily copied.

The dynamics of innovation

Innovation is, by its very nature, only short term. To be innovative, a company or brand must strive for constant leading-edge development, thereby ensuring that it remains ahead of its competition or develops new categories that it can exploit before the competition reaches parity. At this stage, the genuinely innovative company must be launching version 2.0 or moving into the next market. This is all the more apparent in fast-moving markets or in sectors where there is intense competition.

However, the fast pace of development may frequently mean that the product or service development encounters problems that lead the launch date to be postponed. While this itself may not be an issue, there is a potential for consumer confusion, or even negative publicity, as the communications programme may already be underway. A recent example here is the launch of its Internet banking arm Intelligent Finance by the Halifax bank where advertisements had to be taken in the press to explain that there were technical problems with the service and, even more recently, Barclays announcement of security flaws in its on-line banking.

While early publicity may be necessary in this type of environment, cynically to ensure that consumers wait for the product or service rather than opting for a competitor, there is the danger of launching a product or service that does not yet exist or does not function correctly. Any ensuring publicity could be viewed as a necessary risk.

Nevertheless, innovation is crucial. To put it simply, it is more effective to make your own product obsolete before your competition does. It is important to be developing future versions of a product or service so that the product lifecycle is restarted and competitors are always playing catch-up.

More lessons from the information technology sector

As marketing moves away from mass marketing towards customisation and, ultimately personalisation, the life cycle may help to address different target markets in turn. This theory is popularised in Geoffrey Moore’s series of best-selling books on IT marketing but there is no reason why this strategy cannot be applied to other categories. Geoffrey Moore’s “bowling alley” approach refers to picking off different market segments, one at a time. All the time, this continues to build critical mass for the product and focuses marketing resources. It helps the product shift from early adopter to early majority status and move away from “the chasm.” This may be achieved by the recognition that the life cycle varies for each different group of consumers. Product development and marketing communications can thus be organised to suit the target segments.

Summary

The current and future brand marketing environment is being becoming more competitive and the pace of change is accelerating. One approach to harness this for the company or brand’s benefit is to revisit life cycle theory and undertake development on a short-term basis. This could include the recognition of different product life cycles for different consumers or different target segments. There is no shame at all in launching a product or service that can be copied by competitors but continual updating is vital to always stay one step ahead. The product launch date could be viewed as the start of the development process not the culmination.

Through the Loop’s Brand Positive™ Knowledge Development Programme has recognised that identification and application of life cycle theory is becoming a key to future marketing development. This feeds into a range of solutions such as Horizon™, Blackjack™ and Bedrock™ that can be offered to clients to address brand evolution issues. These impact across different time scales through short, medium and long-term.